Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 26, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Trading Symbol | 'CDNA | ' |
Entity Registrant Name | 'CareDx, Inc. | ' |
Entity Central Index Key | '0001217234 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 11,792,746 |
Consolidated_Condensed_Balance
Consolidated Condensed Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $7,872 | $5,128 |
Accounts receivable | 1,725 | 2,270 |
Inventory | 614 | 518 |
Prepaid and other assets | 3,319 | 255 |
Total current assets | 13,530 | 8,171 |
Property and equipment, net | 1,665 | 1,553 |
Intangible assets, net | 6,650 | 0 |
Goodwill | 12,005 | 0 |
Restricted cash | 147 | 147 |
Other noncurrent assets | 0 | 2 |
Total assets | 33,997 | 9,873 |
Current liabilities: | ' | ' |
Accounts payable | 1,741 | 618 |
Accrued payroll liabilities | 1,190 | 1,386 |
Accrued and other liabilities | 3,649 | 1,048 |
Accrued royalties | 3,526 | 0 |
Deferred revenue | 674 | 80 |
Current portion of long-term debt, and subordinated convertible note | 10,434 | 4,461 |
Total current liabilities | 21,214 | 7,593 |
Accrued royalties | 0 | 2,804 |
Deferred rent, net of current portion | 1,784 | 1,885 |
Deferred revenue, net of current portion | 1,006 | 1,623 |
Long-term debt, net of current portion | 8,338 | 10,914 |
Convertible preferred stock warrant liability | 808 | 525 |
Contingent consideration | 2,313 | 0 |
Total liabilities | 35,463 | 25,344 |
Commitments and contingencies (Note 8) | ' | ' |
Convertible preferred stock: $0.001 par value; 7,501,370 and 6,417,954 shares authorized at June 30, 2014 and December 31, 2013, respectively; 6,043,808 and 5,155,673 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively; liquidation value of $156,567 and $137,221 at June 30, 2014 and December 31, 2013, respectively | 149,444 | 135,202 |
Stockholders' deficit: | ' | ' |
Common stock: $0.001 par value; 10,000,000 and 7,737,226 shares authorized at June 30, 2014 and December 31, 2013, respectively; 1,012,959 and 1,010,711 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 1 | 1 |
Additional paid-in capital | 9,672 | 9,482 |
Accumulated deficit | -160,583 | -160,156 |
Total stockholders' deficit | -150,910 | -150,673 |
Total liabilities, convertible preferred stock and stockholders' deficit | $33,997 | $9,873 |
Consolidated_Condensed_Balance1
Consolidated Condensed Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ' | ' |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 7,501,370 | 6,417,954 |
Convertible preferred stock, shares issued | 6,043,808 | 5,155,673 |
Convertible preferred stock, shares outstanding | 6,043,808 | 5,155,673 |
Convertible preferred stock, liquidation | $156,567 | $137,221 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 10,000,000 | 7,737,226 |
Common stock, shares issued | 1,012,959 | 1,010,711 |
Common stock, shares outstanding | 1,012,959 | 1,010,711 |
Consolidated_Condensed_Stateme
Consolidated Condensed Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Revenue: | ' | ' | ' | ' |
Testing revenue | $6,710 | $5,333 | $12,544 | $10,142 |
Collaboration and license revenue | 66 | 124 | 156 | 296 |
Total revenue | 6,776 | 5,457 | 12,700 | 10,438 |
Operating expenses: | ' | ' | ' | ' |
Cost of testing | 2,403 | 2,119 | 4,565 | 4,243 |
Research and development | 792 | 846 | 1,512 | 1,848 |
Sales and marketing | 1,610 | 1,548 | 3,084 | 3,117 |
General and administrative | 2,316 | 1,200 | 4,111 | 2,264 |
Total operating expenses | 7,121 | 5,713 | 13,272 | 11,472 |
Loss from operations | -345 | -256 | -572 | -1,034 |
Interest expense, net | -644 | -541 | -1,192 | -1,106 |
Other income (expense), net | 366 | -5 | -163 | -10 |
Loss before income taxes | -623 | -802 | -1,927 | -2,150 |
Income tax benefit | 1,500 | 0 | 1,500 | 0 |
Net income (loss) | $877 | ($802) | ($427) | ($2,150) |
Net income (loss) per share (Note 3): | ' | ' | ' | ' |
Basic | $0.87 | ($0.79) | ($0.42) | ($2.13) |
Diluted | $0.13 | ($0.79) | ($0.42) | ($2.13) |
Shares used to compute net income (loss) per share | ' | ' | ' | ' |
Basic | 1,013,128 | 1,011,123 | 1,012,769 | 1,011,116 |
Diluted | 6,939,568 | 1,011,123 | 1,012,769 | 1,011,116 |
Consolidated_Condensed_Stateme1
Consolidated Condensed Statements of Cash Flows (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating activities | ' | ' |
Net loss | ($427) | ($2,150) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 222 | 415 |
Stock-based compensation | 185 | 38 |
Amortization of deferred revenue | -23 | -125 |
Amortization of debt discount and noncash interest expense | 349 | 300 |
Revaluation of warrants to estimated fair value | 283 | 0 |
Gain on remeasurement of embedded derivative | -118 | 0 |
Non-cash income tax benefit | -1,500 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 545 | -1,637 |
Inventory | -96 | -42 |
Prepaid and other assets | -2,152 | -126 |
Accounts payable | 1,123 | 506 |
Accrued payroll liabilities | -196 | 56 |
Accrued royalties | 721 | 593 |
Deferred revenue | 0 | 1,083 |
Accrued and other liabilities | 2,117 | -188 |
Net cash provided by (used in) operating activities | 1,033 | -1,277 |
Investing activities | ' | ' |
Purchase of property and equipment | -164 | -36 |
Payment for acquisitions, net of cash acquired (Note 4) | -376 | 0 |
Net cash used in investing activities | -540 | -36 |
Financing activities | ' | ' |
Payment of initial public offering costs | -909 | 0 |
Proceeds from subordinated convertible debt, net of issuance costs | 4,982 | 0 |
Principal payments on debt | -1,827 | -32 |
Proceeds from exercise of stock options | 5 | 0 |
Net cash provided by (used in) financing activities | 2,251 | -32 |
Net increase (decrease) in cash and cash equivalents | 2,744 | -1,345 |
Cash and cash equivalents at beginning of period | 5,128 | 5,830 |
Cash and cash equivalents at end of period | $7,872 | $4,485 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Organization | ' |
1. ORGANIZATION | |
CareDx, Inc., (“CareDx” or the “Company”) is a commercial stage company that develops, markets and delivers a diagnostic surveillance solution for heart transplant recipients to help clinicians make personalized treatment decisions throughout a transplant patient’s lifetime. The Company’s commercialized testing solution, the AlloMap heart transplant molecular test (“AlloMap”), an FDA-cleared test, is a blood-based test used to monitor for acute cellular rejection in heart transplant recipients. The Company was incorporated in Delaware in December 1998, as Hippocratic Engineering, Inc. In April 1999, the Company changed its name to BioCardia, Inc., in June 2002 to Expression Diagnostics, Inc., in July 2007 to XDx, Inc. and in March 2014 to CareDx, Inc. The Company’s operations are based in Brisbane, California and it operates in one segment. | |
Initial Public Offering | |
The Company completed an initial public offering (IPO) of its common stock in July 2014. See Note 13 - Subsequent Events, for disclosures related to the IPO and other related transactions. The consolidated condensed financial statements including share and per share amounts, do not give effect to the IPO. See Note 13, Subsequent Events, for pro forma balance sheet data reflecting the IPO and related adjustments as of June 30, 2014. | |
Reverse Stock Split | |
On July 1, 2014, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to reflect a 1 for 6.85 reverse stock split (the “Reverse Stock Split”) of the Company’s outstanding common stock and convertible preferred stock and increase the authorized common stock to 10,000,000 shares, after giving effect to the Reverse Stock Split. The Reverse Stock Split became effective July 14, 2014. The par value per share was not adjusted as a result of the Reverse Stock Split. All authorized, issued and outstanding shares of common stock, convertible preferred stock, options and warrants to purchase common or preferred stock and related per share amounts contained in the financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented and the increase in authorized common stock to 10,000,000 shares for the period ended June 30, 2014. On July 22, 2014, following the Company’s IPO, further revisions were made to the Company’s Certificate of Incorporation that are not reflected in these financial statements. See Note 13 for a description of these changes. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | |
The accompanying unaudited consolidated condensed financial statements include the accounts of CareDx, Inc. and, effective June 10, 2014, its wholly-owned subsidiary, ImmuMetrix, Inc. (see Note 4, Business Combination). All significant intercompany accounts and transactions have been eliminated in consolidation. | |
The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S, generally accepted accounting principles (“U.S. GAAP”), and following the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any other interim period or for any other future year. The consolidated condensed balance sheet as of December 31, 2013 has been derived from audited financial statements at that date but does not include all of the financial information required by U.S. GAAP for complete financial statements. | |
The accompanying consolidated condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2013 included in the Company’s Prospectus filed pursuant to Rule 424(b)(4) on July 18, 2014 with the SEC (the “Prospectus”). | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to (i) revenue recognition, (ii) the differences between amounts billed and estimated receipts from payers, (iii) the determination of the accruals for clinical studies, (iv) the determination of refunds to be requested by third-party payers,(v) the fair value of assets and liabilities, (vi) the valuation of warrants to purchase convertible preferred stock,(vii) the determination of fair value of the Company’s common stock, (viii) the contingent consideration in a business acquisition, (ix) the fair value of the embedded derivative associated with the subordinated convertible note, (x) the determination of the valuation allowance and estimated tax benefit associated with deferred tax assets and net deferred tax liability, (xi) any impairment of long-lived assets including in-process technology and goodwill and (xii) legal contingencies. Actual results could differ from those estimates. | |
Concentration of Credit Risk | |
The Company is subject to credit risk from its accounts receivable which are derived from revenue earned from AlloMap tests provided for patients located in the U.S. and billed to various third-party payers. For the three months ended June 30, 2014 and 2013, approximately 49% and 57%, respectively, of testing revenue was derived from Medicare. For the six months ended June 30, 2014 and 2013, approximately 49% and 55%, respectively, of testing revenue was derived from Medicare. No other payer represented more than 10% of testing revenue for these periods. At June 30, 2014, approximately 72% of accounts receivable were from Medicare. No other payer represented more than 10% of accounts receivable at June 30, 2014. | |
Fair Value of Financial Instruments | |
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and it takes into consideration the assumptions that market participants would use when pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement of an asset or liability requires management to make judgments and to consider specific characteristics of that asset or liability. | |
The carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. The carrying amount of the convertible preferred stock warrant liability and the subordinated convertible note equity call option liability (see Note 10) also represent their fair value. | |
Cash Equivalents | |
The Company considers all highly liquid investments that are readily convertible into cash having maturities at the time of purchase of three months or less to be cash equivalents. Cash equivalents include money market funds, obligations of U.S. government agencies, and government-sponsored entities which are carried at fair value. | |
Deferred Offering Costs | |
Deferred offering costs, which primarily consist of direct incremental legal, accounting and printing fees relating to the IPO, were capitalized. The deferred offering costs will be offset against IPO proceeds upon the consummation of the offering in July 2014. As of June 30, 2014 and December 31, 2013, $2.8 million and $0, respectively, of deferred offering costs were capitalized in prepaid and other assets on the consolidated condensed balance sheets. | |
Testing Revenue | |
The Company recognizes revenues for tests delivered when the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. | |
The first criteria is satisfied when a third-party payer makes a coverage decision or enters into a contractual arrangement with the Company for the test. The second criteria is satisfied when the Company performs the test and delivers the test result to the ordering physician. The third criteria is satisfied if the third-party payer’s coverage decision or reimbursement contract specifies a price for the test. The fourth criteria is satisfied based on management’s judgments regarding the collectability of the fees charged under the arrangement. Such judgments include review of past payment history. AlloMap testing may be considered investigational by some payers and not covered under their reimbursement policies. Others may cover the test, but not pay a set or determinable amount. As a result, in the absence of a reimbursement agreement or sufficient payment history, collectability cannot reasonably be assured so revenue is not recognized at the time the test is delivered. | |
If all criteria set forth above are met, revenue is recognized. When the first, third or fourth criteria are not met but third-party payers make a payment to the Company for tests performed, the Company recognizes revenue on the cash basis in the period in which the payment is received. | |
Revenue is recognized on the accrual basis net of adjustments for differences between amounts billed and the estimated receipts from payers. The amount the Company expects to collect may be lower than the agreed upon amount due to several factors, such as the amount of patient co-payments, the existence of secondary payers and claim denials. Estimated receipts are based upon historical payment practices of payers. Differences between estimated and actual cash receipts are recorded as an adjustment to revenue, which have been immaterial to date. | |
Collaboration and License Revenue | |
The Company generates revenue from collaboration and license agreements. Collaboration and license agreements may include non-refundable upfront payments, partial or complete reimbursement of research and development costs, contingent payments based on the occurrence of specified events under the agreements, license fees and royalties on sales of products or product candidates if they are successfully commercialized. The Company’s performance obligations under the collaborations may include the transfer of intellectual property rights in the form of licenses, obligations to provide research and development services and obligations to participate on certain development committees with the collaboration partners. The Company makes judgments that affect the periods over which it recognizes revenue. The Company periodically reviews its estimated periods of performance based on the progress under each arrangement and accounts for the impact of any change in estimated periods of performance on a prospective basis. | |
The Company recognizes contingent consideration received from the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved, which the Company believes is more consistent with the substance of its performance under its various license and collaboration agreements. The Company did not recognize any milestones during the three months or six month periods ended June 30, 2014 or 2013. | |
Cost of Testing | |
Cost of testing reflects the aggregate costs incurred in delivering the Company’s AlloMap test results to clinicians. The components of cost of testing are materials and service costs, direct labor costs, including stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples and allocated overhead including rent, information technology, equipment depreciation and utilities and royalties. Costs associated with performing tests (except royalties) are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. As a result, our cost of testing as a percentage of revenue may vary significantly from period to period because we do not recognize all revenue in the period in which the associated costs are incurred. Royalties for licensed technology, calculated as a percentage of test revenues, are recorded as license fees in cost of testing at the time the test revenues are recognized. | |
Business Combinations | |
In accordance with ASC 805, Business Combinations, the Company determines and allocates the purchase price of an acquired business to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. | |
Goodwill and indefinite-lived intangible assets including acquired in-process technology are reviewed for impairment on an annual basis or more frequently if events or circumstances indicate that goodwill or indefinite-lived intangible assets may be impaired. The Company’s goodwill evaluation is based on both qualitative and quantitative assessments regarding the fair value of goodwill relative to its carrying value. The Company assesses qualitative factors to determine if its sole reporting unit’s fair value is more likely than not to exceed its carrying value, including goodwill. In the event the Company determines that it is more likely than not that its reporting unit’s fair value is less than its carrying amount, quantitative testing is performed comparing recorded values to estimated fair values. If the fair value exceeds the carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, then the Company would calculate the potential impairment loss by comparing the implied fair value of goodwill with the carrying value. If the implied fair value of goodwill is less than the carrying value, then an impairment charge would be recorded. The Company performs its annual evaluation of goodwill during the fourth quarter of each fiscal year. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of the asset to its carrying value, without consideration of any recoverability test. | |
In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity, the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value as a component of operating expenses. | |
Transaction costs associated with these acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. | |
Stock–Based Compensation | |
The Company uses the Black-Scholes valuation model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, volatility using data of similar companies in the diagnostics industry, and risk-free rates based on the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and dividend yield based on the Company’s historical data. | |
The Company uses the straight-line attribution method for recognizing compensation expense. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company’s historical experience. | |
Equity instruments granted to nonemployees are valued using the Black-Scholes valuation model and are subject to periodic revaluation over their vesting terms. Nonemployee stock compensation is recognized upon vesting of the stock options which is commensurate with the period over which services are provided. | |
Impairment | |
The Company evaluates its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. The Company has not identified any such impairment losses to date. | |
Warrants | |
The Company has freestanding warrants enabling counterparties to purchase shares of its convertible preferred stock and common stock. In accordance with the accounting guidance regarding distinguishing liabilities from equity, freestanding warrants for convertible preferred stock that are contingently redeemable are classified as liabilities on the balance sheets and recorded at their estimated fair value. These warrants are remeasured at each balance sheet date and any change in estimated fair value is recognized in other income (expense), net on the statements of operations. The Company adjusts the liability for changes in estimated fair value until the earlier of the exercise or expiration of the warrants or the completion of a liquidation event, including the completion of an initial public offering, at which time all preferred stock warrants would be converted into warrants to purchase common stock, and, accordingly, the liability would be reclassified to equity. | |
The Company accounts for its warrants for shares of common stock as equity in accordance with the accounting guidance distinguishing liabilities from equity. | |
Comprehensive Loss | |
Net loss and comprehensive loss are the same for all periods presented. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. | |
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU provide guidance on the financial statements presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions, in which case such an unrecognized tax benefit should be presented in the financial statements as a liability. The amendments in this ASU do not require new recurring disclosures and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company adopted this guidance during the first quarter of 2014 and such adoption did not have a material impact on our condensed financial statements. |
Net_Income_Loss_Per_Share
Net Income (Loss) Per Share | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Net Income (Loss) Per Share | ' | ||||||||||||||||
3. NET INCOME (LOSS) PER SHARE | |||||||||||||||||
Basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period, without consideration for common share equivalents. | |||||||||||||||||
Diluted net income (loss) per common share is computed by dividing the net income (loss) by the sum of the weighted-average quantities of common shares and common share equivalents outstanding during the period, to the extent that such common share equivalents are dilutive. Our common share equivalents include convertible preferred stock, the subordinated convertible note, and options and warrants to purchase common and convertible preferred stock. Common share equivalents for convertible preferred stock and the subordinated convertible note are determined using the if-converted method. Common share equivalents for options and warrants to purchase common and convertible preferred stock are determined using the treasury-stock method. | |||||||||||||||||
For the three months ended June 30, 2014, common share equivalents have been included in diluted net income per share, as the effect to net income per share is dilutive. For the six months ended June 30, 2014, and for the three and six months ended June 30, 2013, all common share equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be antidilutive. | |||||||||||||||||
The following tables set forth the computation of the Company’s basic and diluted net income (loss) per common share (in thousands, except per share data): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income (loss) | $ | 877 | $ | (802 | ) | $ | (427 | ) | $ | (2,150 | ) | ||||||
Add: interest expense related to subordinated convertible note, less gain on change in fair value of derivative related to subordinated convertible note | 15 | — | — | — | |||||||||||||
Net income (loss) attributable to common stockholders | $ | 892 | $ | (802 | ) | $ | (427 | ) | $ | (2,150 | ) | ||||||
Denominator: | |||||||||||||||||
Weighted-average shares used to compute basic net income (loss) per common share | 1,013,128 | 1,011,123 | 1,012,769 | 1,011,116 | |||||||||||||
Effect of potentially dilutive securities: | |||||||||||||||||
Employee stock options | 381,434 | — | — | — | |||||||||||||
Convertible preferred stock | 5,355,280 | — | — | — | |||||||||||||
Subordinated convertible note | 189,726 | — | — | — | |||||||||||||
Weighted-average shares used to compute diluted net income (loss) per common share | 6,939,568 | 1,011,123 | 1,012,769 | 1,011,116 | |||||||||||||
Net income (loss) per share | |||||||||||||||||
Net income (loss) per common share - basic | $ | 0.87 | $ | (0.79 | ) | $ | (0.42 | ) | $ | (2.13 | ) | ||||||
Net income (loss) per common share - diluted | $ | 0.13 | $ | (0.79 | ) | $ | (0.42 | ) | $ | (2.13 | ) | ||||||
The following potentially dilutive securities have been excluded from diluted net income (loss) per common share, because their effect would be antidilutive: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Options to purchase common stock | 469,163 | 505,043 | 907,318 | 505,043 | |||||||||||||
Warrants to purchase common stock | 82,190 | 82,190 | 82,190 | 82,190 | |||||||||||||
Warrants to purchase convertible preferred stock | 541,613 | 541,613 | 541,613 | 541,613 | |||||||||||||
Subordinated convertible note | — | — | 233,311 | — | |||||||||||||
Convertible preferred stock | — | 5,160,085 | 6,048,220 | 5,160,085 | |||||||||||||
Total | 1,092,966 | 6,288,931 | 7,812,652 | 6,288,931 | |||||||||||||
The assumed conversion of Series G convertible preferred stock issuable in connection with the subordinated convertible note (see Note 10) was calculated based upon its $5.0 million principal balance plus accrued interest at a conversion price of $21.78 per share. | |||||||||||||||||
Shares issuable upon the achievement of a future milestone in conjunction with the business combination (see Note 4) are not included in the above chart due to the uncertainty of the Company achieving this performance metric. | |||||||||||||||||
Note 13 also describes shares issued in conjunction with the Company’s IPO subsequent to June 30, 2014 and the conversion of the above convertible preferred stock and subordinated convertible note. |
Business_Combination
Business Combination | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Business Combination | ' | ||||||||||||||||
4. BUSINESS COMBINATION | |||||||||||||||||
Description of the Transaction | |||||||||||||||||
On June 10, 2014, in accordance with an Agreement and Plan of Merger (“Agreement”), the Company acquired ImmuMetrix, Inc. (“IMX”), a privately held development stage company working in new technologies using cell-free donor DNA (“cfDNA”) technology for the diagnosis, treatment and management of transplant rejection, immune disorders and diseases, including the development of a new, non-invasive test designed to detect the early stages of solid organ transplant rejection. The Company acquired all IMX assets associated with transplant diagnostics, including related immune repertoire and infectious diseases. An IMX successor company retained the limited assets not associated with transplant diagnostics. The acquisition was structured as a tax-free reorganization. | |||||||||||||||||
The Company acquired all of the issued and outstanding capital stock of IMX for the total estimated purchase price of $17.2 million consisting of i) $600,000 in cash; ii) 911,364 shares of the Company’s Series G convertible preferred stock with an estimated fair value of $14.2 million, including 23,229 shares of the Company’s Series G convertible preferred stock with an estimated fair value of $0.4 million as a result of the Company’s assumption of IMX outstanding stock options; and iii) an additional payment of 227,845 shares of CareDx Series G convertible preferred stock if a future milestone is achieved. The Agreement provides that the milestone will be achieved if the Company completes 2,500 commercial tests involving the measurement of cfDNA in organ transplant recipients in the United States no later than six years after the closing date of the acquisition. The additional shares to be paid for the achievement of the milestone will be common stock as a result of the Company’s IPO in July 2014 (see Note 13). The fair value of this contingent consideration is $2.3 million at the acquisition date and at June 30, 2014. | |||||||||||||||||
The intellectual property acquired includes an exclusive license from Stanford University to a patent relating to the diagnosis of rejection in organ transplant recipients using cfDNA. | |||||||||||||||||
Basis of Presentation | |||||||||||||||||
The acquisition has been accounted for using the purchase method of accounting. Under the purchase method of accounting, the total purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The excess of purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is considered goodwill. The Company’s results of operations included the activities of IMX from the date of the acquisition. | |||||||||||||||||
Purchase Price Allocation | |||||||||||||||||
In accordance with ASC 805, Business Combinations, the Company recorded the assets acquired and liabilities assumed at their respective estimated fair values as of the acquisition date. The total estimated purchase price of $17.2 million was allocated to the assets acquired and liabilities assumed based on their estimated fair values, including identifiable intangible assets that either arise from a contractual or legal right or are separable from goodwill. There were no tangible assets acquired from IMX. | |||||||||||||||||
The estimated fair value of the Series G convertible preferred stock issued as consideration in the acquisition was derived based primarily on an independent third-party valuation. The fair value measurements were based on significant inputs not observable in the market and thus represent a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures (see Note 5). | |||||||||||||||||
The Company recorded its estimate of the fair value of the contingent consideration based on its evaluation of the probability of the achievement of the contractual conditions that would result in the payment of the contingent consideration. The fair value of the contingent consideration was estimated using the fair value of the shares to be paid if the contingency is met multiplied by management’s 65% estimate of the probability of success. This represents a Level 3 fair value measurement under the fair value hierarchy. The significant inputs in the Level 3 measurement not supported by market activity include the Company’s probability assessments of the milestone being met, as well as the estimated fair value of the Series G stock to be paid. The contingent consideration payable in the Company’s stock represents a liability in accordance with ASC 480-10, Distinguishing Liabilities from Equity. The Company will remeasure this liability each reporting period and record changes in the estimated fair value as a component of operating expenses until the milestone contingency is paid or is no longer achievable. | |||||||||||||||||
The following table summarizes the purchase consideration (in thousands): | |||||||||||||||||
Cash paid upon executing agreement and to be paid upon end of objection period | $ | 600 | |||||||||||||||
Estimated fair value of Series G preferred stock issued | 13,873 | ||||||||||||||||
Estimated fair value of stock options assumed by the Company | 369 | ||||||||||||||||
Contingent consideration - Series G convertible preferred stock to be issued upon the achievement of a future milestone | 2,313 | ||||||||||||||||
Total estimated purchase consideration | $ | 17,155 | |||||||||||||||
The estimated portion of assumed stock options that is subject to future service requirements and will therefore be expensed in the financial statements rather than included in purchase consideration is $32,000. | |||||||||||||||||
The following table provides the allocation of the estimated purchase consideration (in thousands): | |||||||||||||||||
Identifiable intangible assets - In-process technology | $ | 6,650 | |||||||||||||||
Goodwill | 12,005 | ||||||||||||||||
Deferred tax liability, net | (1,500 | ) | |||||||||||||||
Total estimated assets acquired and liabilities assumed | $ | 17,155 | |||||||||||||||
The total purchase consideration previously estimated in the prospectus was $19.1 million. The amounts allocated to goodwill and deferred tax liability, net, in the prospectus were $14.1 million and $1.6 million, respectively. Differences between the amounts in the tables above and the amounts in the prospectus result from a change in the estimated fair value of the Series G convertible preferred stock purchase consideration, from the date when the acquisition was considered probable to the acquisition date. | |||||||||||||||||
Identifiable Intangible Assets and Liabilities | |||||||||||||||||
As part of the purchase price allocation, the Company determined that IMX’s separately identifiable intangible asset was its in-process technology. | |||||||||||||||||
The Company used the Relief from Royalty Approach to value the in-process technology. This method estimates the fair value of an asset by determining the present value of cash flows, net of taxes, associated with incremental profits as a result of relief from royalty on the acquired in-process technology. The baseline data for this analysis was technology-related revenue estimates generated by management, which were utilized to generate the present value of cash flows. A net estimated royalty rate of 12% was applied to the forecasted revenue to estimate the income associated with the asset. | |||||||||||||||||
Cash flows forecasted for the in-process technology were discounted based on a discount rate of 18%. This discount rate was benchmarked with reference to the implied rate of return on assets, as well as an estimate of a market participant’s weighted-average cost of capital. | |||||||||||||||||
The in-process technology is recorded as an indefinite-life intangible asset until it reaches technological feasibility and will be tested for impairment in accordance with ASC 350, Intangibles-Goodwill and Other. Amortization into earnings will begin once the research and development activities are complete and the technology is proven to work, at which time technological feasibility will have been achieved. The Company expects that will occur at approximately the time when revenue is generated in the marketplace, currently estimated to be during the fourth quarter of 2015. | |||||||||||||||||
Amortization will be based on the estimated remaining useful life of the patent when the product is proven feasible, estimated to be 15 years. Amortization will be recorded using the straight line method. | |||||||||||||||||
In estimating the useful life of the acquired identified intangible assets, the Company considered ASC 350-30-35, Intangibles-Goodwill and Other, and reviewed the following: the expected use by the combined company of the assets acquired, legal, regulatory or other contractual provisions that may limit the useful life of an acquired asset or may enable the extension of the useful life of an acquired asset without substantial cost, the effects of obsolescence, demand, competition and other economic factors, and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. | |||||||||||||||||
The amortization of the completed technology is not expected to be deductible for tax purposes, as the transaction was structured as a tax-free reorganization. Accordingly, a deferred tax liability was recorded for the difference between the financial reporting and tax basis of the acquired in-process technology. While the in-process technology is considered an indefinite lived intangible asset, the life will become definite as it will be amortized or impaired prior to the expiration of net operating loss carryforwards available to the Company. As a result, a tax benefit was recorded for the net deferred tax liability of $1.5 million. | |||||||||||||||||
The goodwill is not expected to be deductible for tax purposes. | |||||||||||||||||
Financial Statements of IMX and Pro Forma Impact of the Acquisition of IMX | |||||||||||||||||
IMX audited financial statements for the years ended December 31, 2012 and 2013, unaudited financial statements for the three months ended March 31, 2013 and 2014 and unaudited pro forma condensed combined financial information are presented in the Company’s Prospectus filed on July 18, 2014 with the SEC. | |||||||||||||||||
IMX’s post-acquisition results of operations for the period from June 11, 2014 through June 30, 2014 are included in the Company’s consolidated condensed statements of operations. | |||||||||||||||||
The following table presents pro forma results of operations and gives effect to the IMX transaction as if the transaction had been consummated on January 1, 2013. The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or of the results that may occur in the future. Furthermore, the pro forma financial information does not reflect the impact of any reorganization or operating efficiencies resulting from combining the two companies (in thousands, except per share data). | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net revenue | $ | 6,776 | $ | 5,457 | $ | 12,700 | $ | 10,438 | |||||||||
Net loss | $ | (518 | ) | $ | (1,169 | ) | $ | (2,288 | ) | $ | (1,746 | ) | |||||
Net loss per common share - basic and diluted | $ | (0.51 | ) | $ | (1.16 | ) | $ | (2.26 | ) | $ | (1.73 | ) | |||||
The unaudited pro forma consolidated financial information was prepared using the acquisition method of accounting and are based on the historical financial information of the Company and IMX, reflecting the Company’s and IMX’s results of operations for the three and six month periods ending June 30, 2014 and 2013. The historical financial information has been adjusted to give effect to the pro forma events that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated financial information reflects: (a) the removal of acquisition-related costs of $1.6 million and $1.7 million incurred by both CareDx and IMX for the three and six months ended June 30, 2014, respectively, including the removal of $0.2 million of IMX stock-based compensation expense that resulted from modifications to options in anticipation of the acquisition; (b) the removal of a $1.5 million tax benefit for the three and six months ended June 30, 2014 that resulted from the acquisition; (c) the addition of salaries, benefits and fees for IMX employees and consultants retained after the acquisition; and (d) the addition of the $1.5 million acquisition-related tax benefit for the six months ended June 30, 2013, as if the acquisition had occurred on January 1, 2013 and the benefit had been recognized during the three months ended March 31, 2013. Acquisition related expenses are primarily included in general and administrative expenses. |
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
5. FAIR VALUE MEASUREMENTS | |||||||||||||||||
The Company’s financial instruments are measured and recorded at fair value except for its debt, which is recorded at amortized cost. The three levels of inputs that are used to measure fair value are classified into the following hierarchy: | |||||||||||||||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are active, or inputs other than prices that are observable for the assets or liabilities. | |||||||||||||||||
Level 3—Unobservable inputs for the assets or liabilities. | |||||||||||||||||
The tables below presents the fair value of the Company’s financial assets and liabilities, by level, within the fair value hierarchy that are measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
June 30, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Money market funds | $ | 7,847 | $ | — | $ | — | $ | 7,847 | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | $ | — | $ | — | $ | 2,313 | $ | 2,313 | |||||||||
Convertible preferred stock warrants | — | — | 808 | 808 | |||||||||||||
Derivative liability related to subordinated convertible note | — | — | 120 | 120 | |||||||||||||
Total liabilities | $ | — | $ | — | $ | 3,241 | $ | 3,241 | |||||||||
December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Money market funds | $ | 5,204 | $ | — | $ | — | $ | 5,204 | |||||||||
Liabilities | |||||||||||||||||
Convertible preferred stock warrants | $ | — | $ | — | $ | 525 | $ | 525 | |||||||||
Investments in money market funds are classified within Level 1. At June 30, 2014 and December 31, 2013, money market funds were included on the balance sheets in cash and cash equivalents and in restricted cash. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers between Level 1, Level 2 and Level 3 categories during the periods presented. | |||||||||||||||||
The Company’s liabilities classified as Level 3 were valued based on unobservable inputs and management’s judgment due to the absence of quoted market prices, inherent lack of liquidity and, in the case of the contingent consideration liability and convertible preferred stock warrants, the long-term nature of such financial instruments. | |||||||||||||||||
The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are the Company’s estimated fair value of Series G preferred stock issued and the evaluation of the probability of the achievement of the contractual conditions that would result in the payment of the contingent consideration. Generally, increases (decreases) in the estimation of the fair value of the stock or of the probability percentage would result in a directionally similar impact to the fair value measurement of the contingent consideration liability. Any change in estimated fair value of the contingent consideration liability is recognized in operating expenses. At June 30, 2014, the estimated fair value of Series G preferred stock was $15.62, and the estimated probability of achievement of the contractual conditions that would result in the payment of the contingent consideration was 65%. | |||||||||||||||||
The Company’s convertible preferred stock warrants are classified as Level 3 because they were valued based on unobservable inputs and management’s judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such financial instruments. These assumptions are inherently subjective and involve significant management judgment. The significant unobservable input used in the fair value measurement of the warrant liability is the fair value of the underlying common stock at the valuation remeasurement date. Generally, increases (decreases) in the fair value of the underlying common stock would result in a directionally similar impact to the fair value measurement of the preferred stock warrants. Any change in estimated fair value is recognized in other income or expense on the statements of operations. | |||||||||||||||||
The estimated fair value of the convertible preferred stock warrant liability was determined using the Black-Scholes option pricing model using the following assumptions: | |||||||||||||||||
As of | As of | ||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||
Estimated fair value of common stock | $ | 11.44 | $ | 12.4 | |||||||||||||
Risk-free interest rate | 0.9% - 1.6% | 0.8% - 2.1% | |||||||||||||||
Volatility | 41% - 43% | 40% - 45% | |||||||||||||||
Estimated term equal to the remaining contractual term | 2.8 - 5.1 years | 3.3 - 5.6 years | |||||||||||||||
Expected dividend yield | — | — | |||||||||||||||
The significant unobservable input used in the fair value measurement of the derivative liability related to the subordinated convertible note is the probability assigned to the various scenarios. Generally, increases (decreases) in the probability of the factors primarily impacting the valuation would result in a directionally similar impact to the fair value measurement of the derivative liability. Any change in estimated fair value is recognized in other income (expense) on the statements of operations. | |||||||||||||||||
The following table presents the changes in the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Convertible | Derivative | Total | ||||||||||||||
Consideration | Preferred | Liability | |||||||||||||||
Liability | Stock | Related to | |||||||||||||||
Warrants | Subordinated | ||||||||||||||||
Convertible | |||||||||||||||||
Note | |||||||||||||||||
Balance as of December 31, 2013 | $ | — | $ | 525 | $ | — | $ | 525 | |||||||||
Issuance of financial instruments | 2,313 | — | 239 | 2,552 | |||||||||||||
Change in fair value | — | 283 | (119 | ) | 164 | ||||||||||||
Balance as of June 30, 2014 | $ | 2,313 | $ | 808 | $ | 120 | $ | 3,241 | |||||||||
Inventory
Inventory | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventory | ' | ||||||||
6. INVENTORY | |||||||||
The following table summarizes the Company’s inventory (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Finished goods | $ | 261 | $ | 230 | |||||
Raw materials | 353 | 288 | |||||||
Total inventory | $ | 614 | $ | 518 | |||||
Accrued_and_Other_Liabilities
Accrued and Other Liabilities | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Payables And Accruals [Abstract] | ' | ||||||||
Accrued and Other Liabilities | ' | ||||||||
7. ACCRUED AND OTHER LIABILITIES | |||||||||
The following table represents the components of accrued and other liabilities (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued IPO costs | $ | 1,126 | $ | — | |||||
Professional fees | 890 | 175 | |||||||
Test sample processing fees | 306 | 195 | |||||||
Accrued overpayments and refunds | 183 | 215 | |||||||
Bifurcated derivative associated with subordinated convertible note | 120 | — | |||||||
Clinical studies | 108 | 84 | |||||||
Deferred rent – current portion | 173 | 145 | |||||||
Capital leases – current portion | 81 | 43 | |||||||
Other accrued expenses | 662 | 191 | |||||||
Total accrued and other liabilities | $ | 3,649 | $ | 1,048 | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments And Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
8. COMMITMENTS AND CONTINGENCIES | |
Royalty Commitments | |
In 2004, the Company entered into a license agreement with Roche Molecular Systems, Inc., or Roche, amended in 2006 and 2007, whereby the Company uses licensed technology to perform certain clinical laboratory services. The Company incurs royalty expenses that are based on a mid-single digit percentage of test revenues. Royalties are recorded as a component of cost of testing on the statements of operations. | |
On February 11, 2014 Roche filed a demand for arbitration with the American Arbitration Association seeking a declaration that the Company has materially breached the Roche license agreement by failing to report and pay royalties owing to Roche in respect of licensed services that the Company performed after July 1, 2011. Roche seeks damages in the form of unpaid royalties from July 1, 2011 to March 31, 2013 of $1.8 million plus interest of $85,000 and royalties in an unspecified amount from April 1, 2013 to present, which, based upon the royalty rate currently stated in the license agreement, the Company estimates to be an additional $1.6 million through June 30, 2014. While management believes it has meritorious defenses to these claims, which it plans to fully pursue in the arbitration, the Company has fully reserved the amount of these unpaid royalties on its balance sheet, and the amount of these unpaid royalties has been reflected as an expense in the Company’s statements of operations in the periods to which the royalties relate. | |
Arbitration for this matter has now been scheduled for early 2015. As a result, the Company has reclassified the $3.5 million as of June 30, 2014 to current liabilities. |
Collaboration_and_Licensing_Ag
Collaboration and Licensing Agreements | 6 Months Ended |
Jun. 30, 2014 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ' |
Collaboration and Licensing Agreements | ' |
9. COLLABORATION AND LICENSING AGREEMENTS | |
Laboratory Corporation of America Holdings (“LabCorp”) | |
In April 2012, the Company entered into a Collaboration and License Agreement with LabCorp for the purpose of developing a lupus flare predictor test. The Company and LabCorp share equally the costs and expenses of developing the lupus flare predictor test; however LabCorp’s share of the development cost is subject to certain limits at each stage of the arrangement. | |
Under this agreement, LabCorp paid the Company a nonrefundable and non-creditable upfront license fee payment of $1,000,000. | |
For the deliverables under the agreement without stand-alone value, the allocated consideration is being recognized as a combined unit of accounting ratably over the Company’s estimated period of performance. During the three months ended June 30, 2014 and 2013, the Company recognized $1,800 and $104,100, respectively, in revenue under this arrangement, which consisted of amortization of upfront license fee of $0 and $62,500, respectively, and reimbursement of research and development expenses of $1,800 and $41,600, respectively. During the six months ended June 30, 2014 and 2013, the Company recognized $31,200 and $267,300, respectively, in revenue under this arrangement, which consisted of amortization of upfront license fee of $15,000 and $125,000, respectively, and reimbursement of research and development expenses of $16,200 and $142,300, respectively. Such revenues are included in collaboration and license revenue on the statements of operations. | |
Phase 1 of the project was completed in the first quarter of 2014. The remaining $611,000 of the upfront license fee is included in current deferred revenue at June 30, 2014, based on management’s current expectation that the revenue will be realized within the next twelve months. | |
Included in research and development expenses were $3,600 and $83,000 for the three months ended June 30, 2014 and 2013, respectively, for development costs with respect to Phase 1. Such amounts were $32,000 and $284,000 for the six months ended June 30, 2014 and 2013, respectively. | |
Diaxonhit (“DHT”) | |
In June 2013, the Company entered into an exclusive Distribution and Licensing Agreement with DHT, a French public company, whereby DHT will have the AlloMap test performed in a European laboratory and commercialize the test in the European Economic Area (“EEA”). The agreement will expire at the later of the last-to-expire patent in the EEA or ten years from the first commercial sale of the test in the EEA, which is expected to occur in late 2014 or early 2015. | |
Consideration under the agreement includes an upfront cash payment of approximately €387,500 ($503,000) that is designated to offset royalties earned by the Company in the first three years following the first commercial sale. The Company is entitled to receive royalties from DHT as a percent of net sales, as defined in the agreement, of AlloMap tests in the mid to high teens. Approximately €250,000 ($344,000) of the upfront payments is refundable under certain circumstances. Upon confirmation that the CE mark was in place, the Company also received an equity payment of DHT common stock with a value of €387,500 ($503,000). These shares were promptly sold by the Company in July 2013 for total consideration of $467,000. | |
Other consideration that may be earned by the Company includes agreed-upon per unit pricing for the supply of AlloMap products, and additional royalties that are payable upon the achievement of various sales milestones by DHT. In this arrangement, there is one combined unit of accounting. | |
Since commercial sales have not yet begun in the EEA, the Company has yet to deliver AlloMap products or related services to DHT. Accordingly, no revenue from this arrangement has been recognized as of June 30, 2014. | |
CardioDx-Related Party | |
In 2005, the Company entered into a services agreement with a related party, CardioDx, Inc. (“CDX”), whereby the Company provided CDX with biological samples and related data and performed laboratory services on behalf of CDX. Each company granted the other a worldwide license under certain of its intellectual property rights. Pursuant to this agreement, CDX pays royalties to the Company of a low single-digit percentage of the cash collected from sales of CDX licensed products. In 2009, CDX terminated the services portion of this agreement, however, the royalty obligation from CDX continues until the tenth anniversary of the first commercial sale of a CDX licensed product. The first commercial sale of such product by CDX occurred in 2009, therefore the royalty obligation to the Company continues until 2019. Two board members of CDX serve on the Company’s board of directors and are affiliated with stockholders of the Company. Royalty revenues, recorded when earned, were $59,000 and $21,000 for the three months ended June 30, 2014 and 2013, respectively. Such amounts were $117,000 and $30,000 for the six months ended June 20, 2014 and 2013, respectively. The Company had receivable balances from CDX of $59,000 and $37,000 at June 30, 2014 and December 31, 2013, respectively. |
Subordinated_Convertible_Note
Subordinated Convertible Note | 6 Months Ended |
Jun. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
Subordinated Convertible Note | ' |
10. SUBORDINATED CONVERTIBLE NOTE | |
On April 17, 2014, the Company issued a $5.0 million Subordinated Convertible Promissory Note to Illumina, Inc. (the “Note”) which provides for interest at an annual rate of 8.0%. The Note matures one year following its issuance with principal and unpaid interest due at that time unless the Note is converted into equity prior to the maturity date. As described below, conversion is mandatory in the event of a Qualified Initial Public Offering. As described in Note 13, Subsequent Events, our Initial Public Offering closed on July 22, 2014 and the Note converted into 510,777 shares of our common stock in accordance with its terms. | |
The features of the Note include five different and mutually exclusive conversion/settlement provisions. | |
In accordance with ASC 815, “Derivatives and Hedging” and ASC 470, “Debt”, the Company determined whether any features of the Note constitute embedded derivatives that require bifurcation between the derivative and the host instrument, whether there is a beneficial conversion feature, as well as determining the fair value of relevant elements. | |
The Company determined that the optional conversion or repayment upon a Change in Control is an equity call option with a potentially variable value to be received and meets the definition of a derivative which would be required to be bifurcated. The Note provided that in the event of a Change in Control closing prior to a Qualified Financing or Qualified IPO, at Illumina’s option, either (i) the Company shall pay Illumina 1.5X the principal and accrued interest under the Note, which shall constitute full repayment of the Note, or (ii) the principal and accrued interest may be converted immediately prior to the consummation of the Change of Control into that number of shares of common stock as is yielded when the principal and accrued interest under the Note is divided by a pre-determined amount. “Change of Control” means (a) (i) the sale, conveyance or disposal of all or substantially all of the Company’s assets in one transaction or a series of related transactions, (ii) the acquisition of the Company by merger, consolidation with any other corporation or any other transaction or series of related transactions in which more than 50% of the voting power of the Company is not retained by the holders of capital stock of the Company, or (b) the approval by the board of directors and stockholders of a plan of liquidation of the Company. | |
The estimated fair value of this embedded derivative was affected by the estimated probability assigned to the various scenarios for the host instrument. As of April 17, 2014, management estimated repayment upon a change in control within the loan term as a 10% probability. | |
As of June 30, 2014 management estimated repayment upon a change in control within the loan term a 5% probability. The estimated fair value of the bifurcated embedded derivative liability was $0.2 million at April 17, 2014 and was remeasured at June 30, 2014 to $0.1 million. The original estimated fair value of the embedded derivative is accounted for as a debt discount to the subordinated convertible note payable on the consolidated condensed balance sheet at June 30, 2014 and is remeasured at each reporting period and amortized to interest expense to the maturity date. The estimated fair value of the embedded derivative liability is included in accrued and other liabilities on the consolidated condensed balance sheets. Amortization of the debt discount was $51,000 for the period from April 17, 2014 to June 30, 2014. Remeasurement of the embedded derivative at June 30, 2014 resulted in other income of approximately $0.1 million for the quarter ended June 30, 2014. |
Stock_Option_Plans
Stock Option Plans | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Stock Option Plans | ' | ||||||||||||||||
11. STOCK OPTION PLANS | |||||||||||||||||
Prior to it IPO the Company had one active stock option plan, the 2008 Equity Incentive Plan, and one terminated stock option plan, the 1998 Stock Plan. | |||||||||||||||||
The following table summarizes option activity and related information during the six months ended June 30, 2014 under the 2008 Equity Incentive Plan and for options which remain outstanding under the 1998 Stock Plan: | |||||||||||||||||
Shares | Options Outstanding | ||||||||||||||||
Available | |||||||||||||||||
for Grant | Number of | Weighted- | |||||||||||||||
Shares | average | ||||||||||||||||
Exercise Price | |||||||||||||||||
Balance at December 31, 2013 | 332,995 | 466,965 | $ | 1.99 | |||||||||||||
Increase in shares reserved for issuance | 102,189 | — | $ | — | |||||||||||||
Granted | (461,795 | ) | 461,795 | $ | 12.4 | ||||||||||||
Exercised | — | (2,199 | ) | $ | 2.56 | ||||||||||||
Forfeited | 14,532 | (14,532 | ) | $ | 10.46 | ||||||||||||
Expired | 12,079 | (12,079 | ) | $ | 2.96 | ||||||||||||
Balance at June 30, 2014 | — | 899,950 | $ | 7.22 | |||||||||||||
The weighted-average grant-date fair value of options granted during the six months ended June 30, 2014 using the Black-Scholes valuation model was $4.94 per share. | |||||||||||||||||
Options outstanding and exercisable that have vested and are expected to vest at June 30, 2014 are as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | average | average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||
Contractual | (in thousands) | ||||||||||||||||
Life (Years) | |||||||||||||||||
Vested | 367,706 | $ | 2.69 | 6.25 | $ | 3,219 | |||||||||||
Expected to vest | 532,244 | $ | 10.32 | 9.49 | 606 | ||||||||||||
Total | 899,950 | $ | 7.22 | 8.17 | $ | 3,825 | |||||||||||
In the table above, aggregate intrinsic value represents the difference between the exercise price and the estimated fair value of the Company’s common stock of $11.44 per share, as determined by the Board of Directors, as of June 30, 2014. | |||||||||||||||||
The Company’s results of operations include expense relating to employee and nonemployee stock-based payment awards as follows (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of testing | $ | 9 | $ | 1 | $ | 9 | $ | 2 | |||||||||
Research and development | 21 | 2 | 22 | 4 | |||||||||||||
Sales and marketing | 8 | 1 | 9 | 2 | |||||||||||||
General and administrative | 99 | 15 | 145 | 30 | |||||||||||||
$ | 137 | $ | 19 | $ | 185 | $ | 38 | ||||||||||
Valuation Assumptions | |||||||||||||||||
The fair value of stock-based awards was estimated using the Black-Scholes option-pricing model using the following weighted-average assumptions: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Risk-free interest rate | 1.74 | % | 1.02 | % | 1.7 | % | 1.02 | % | |||||||||
Volatility | 42.18 | % | 45.29 | % | 41.84 | % | 45.41 | % | |||||||||
Expected term, in years | 5.3 | 6 | 5.1 | 6 | |||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % | |||||||||
At June 30, 2014, there was approximately $2.2 million of total unrecognized stock-based compensation, net of estimated forfeitures, related to nonvested employee stock option awards granted that will be recognized on a straight-line basis over the remaining vesting period of 3.7 years. |
Income_Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
12. INCOME TAXES | |
In conjunction with the acquisition of IMX a tax benefit of $1.5 million was recognized during the three months ended June 30, 2014. This benefit resulted from the expectation that amortization of the in-process technology acquired, when completed and placed in service, is not expected to be deductible for tax purposes, as the transaction was structured as a tax-free reorganization. Accordingly, a deferred tax liability was recorded at the acquisition date for the difference between the financial reporting and tax basis of the acquired in-process technology. While the in-process technology is considered an indefinite lived intangible asset, this asset is expected to be amortized or impaired prior to the expiration of net operating loss carryforwards available to the Company. |
Subsequent_Events
Subsequent Events | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Subsequent Events [Abstract] | ' | ||||||||
Subsequent Events | ' | ||||||||
13. SUBSEQUENT EVENTS | |||||||||
Authorized Share Capital | |||||||||
Effective July 22, 2014, the Company’s certificate of incorporation was amended and restated to provide for 100,000,000 authorized shares of common stock with a par value of $0.001 per share, and 10,000,000 authorized shares of preferred stock with a par value of $0.001 per share. | |||||||||
Initial Public Offering | |||||||||
On July 16, 2014, the Company’s registration statement on Form S-1 (File No. 333-196494) relating to the IPO of its common stock was declared effective by the SEC. The IPO closed on July 22, 2014, at which time the Company sold 4,000,000 shares, and in August 2014 the underwriters partially exercised their overallotment option, at which time the Company sold an additional 220,000 shares. The Company received net cash proceeds of approximately $35.5 million from the IPO, including the overallotment exercise, net of underwriting discounts and commissions and expenses paid by the Company. | |||||||||
Pro Forma Selected Balance Sheet Data | |||||||||
The selected balance sheet data below presents, on a pro forma basis, the impact of the Company’s IPO on the Company’s consolidated condensed balance sheet as of June 30, 2014. Specifically, the pro forma consolidated condensed balance sheet data gives effect to the following in connection with the completion of the IPO: (i) the sale of 4,220,000 shares of common stock at a price to the public of $10.00 per share, before underwriting discounts and estimated offering costs, (ii) the conversion of all of the Company’s outstanding shares of convertible preferred stock into an aggregate of 6,048,220 shares of common stock, (iii) the issuance of 510,000 shares upon conversion of the subordinated convertible note described in Note 10 above, and (iv) the reclassification of the convertible preferred stock warrant liability of $0.8 million to additional paid-in capital. | |||||||||
As of June 30, 2014 | |||||||||
(in thousands) | Actual | Pro Forma | |||||||
(Unaudited) | |||||||||
Selected Balance Sheet Data: | |||||||||
Cash and cash equivalents | $ | 7,872 | $ | 44,327 | |||||
Total debt | 18,772 | 13,977 | |||||||
Convertible preferred stock | 149,444 | — | |||||||
Total stockholders’ (deficit) equity | (150,910 | ) | 39,885 | ||||||
The Company has evaluated subsequent events through August 28, 2014, the date these unaudited interim consolidated condensed financial statements are considered issued. |
Organization_Policies
Organization (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Reverse Stock Split | ' |
Reverse Stock Split | |
On July 1, 2014, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to reflect a 1 for 6.85 reverse stock split (the “Reverse Stock Split”) of the Company’s outstanding common stock and convertible preferred stock and increase the authorized common stock to 10,000,000 shares, after giving effect to the Reverse Stock Split. The Reverse Stock Split became effective July 14, 2014. The par value per share was not adjusted as a result of the Reverse Stock Split. All authorized, issued and outstanding shares of common stock, convertible preferred stock, options and warrants to purchase common or preferred stock and related per share amounts contained in the financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented and the increase in authorized common stock to 10,000,000 shares for the period ended June 30, 2014. On July 22, 2014, following the Company’s IPO, further revisions were made to the Company’s Certificate of Incorporation that are not reflected in these financial statements. See Note 13 for a description of these changes. | |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited consolidated condensed financial statements include the accounts of CareDx, Inc. and, effective June 10, 2014, its wholly-owned subsidiary, ImmuMetrix, Inc. (see Note 4, Business Combination). All significant intercompany accounts and transactions have been eliminated in consolidation. | |
The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S, generally accepted accounting principles (“U.S. GAAP”), and following the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of the Company’s financial information. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014 or for any other interim period or for any other future year. The consolidated condensed balance sheet as of December 31, 2013 has been derived from audited financial statements at that date but does not include all of the financial information required by U.S. GAAP for complete financial statements. | |
The accompanying consolidated condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2013 included in the Company’s Prospectus filed pursuant to Rule 424(b)(4) on July 18, 2014 with the SEC (the “Prospectus”). | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses in the financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to (i) revenue recognition, (ii) the differences between amounts billed and estimated receipts from payers, (iii) the determination of the accruals for clinical studies, (iv) the determination of refunds to be requested by third-party payers,(v) the fair value of assets and liabilities, (vi) the valuation of warrants to purchase convertible preferred stock,(vii) the determination of fair value of the Company’s common stock, (viii) the contingent consideration in a business acquisition, (ix) the fair value of the embedded derivative associated with the subordinated convertible note, (x) the determination of the valuation allowance and estimated tax benefit associated with deferred tax assets and net deferred tax liability, (xi) any impairment of long-lived assets including in-process technology and goodwill and (xii) legal contingencies. Actual results could differ from those estimates. | |
Concentration of Credit Risk | ' |
Concentration of Credit Risk | |
The Company is subject to credit risk from its accounts receivable which are derived from revenue earned from AlloMap tests provided for patients located in the U.S. and billed to various third-party payers. For the three months ended June 30, 2014 and 2013, approximately 49% and 57%, respectively, of testing revenue was derived from Medicare. For the six months ended June 30, 2014 and 2013, approximately 49% and 55%, respectively, of testing revenue was derived from Medicare. No other payer represented more than 10% of testing revenue for these periods. At June 30, 2014, approximately 72% of accounts receivable were from Medicare. No other payer represented more than 10% of accounts receivable at June 30, 2014. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which the Company would transact, and it takes into consideration the assumptions that market participants would use when pricing the asset or liability. The Company’s assessment of the significance of a particular input to the fair value measurement of an asset or liability requires management to make judgments and to consider specific characteristics of that asset or liability. | |
The carrying amounts of certain of the Company’s financial instruments, including cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their short maturities. The carrying amount of the convertible preferred stock warrant liability and the subordinated convertible note equity call option liability (see Note 10) also represent their fair value. | |
Cash Equivalents | ' |
Cash Equivalents | |
The Company considers all highly liquid investments that are readily convertible into cash having maturities at the time of purchase of three months or less to be cash equivalents. Cash equivalents include money market funds, obligations of U.S. government agencies, and government-sponsored entities which are carried at fair value. | |
Deferred Offering Costs | ' |
Deferred Offering Costs | |
Deferred offering costs, which primarily consist of direct incremental legal, accounting and printing fees relating to the IPO, were capitalized. The deferred offering costs will be offset against IPO proceeds upon the consummation of the offering in July 2014. As of June 30, 2014 and December 31, 2013, $2.8 million and $0, respectively, of deferred offering costs were capitalized in prepaid and other assets on the consolidated condensed balance sheets. | |
Testing Revenue | ' |
Testing Revenue | |
The Company recognizes revenues for tests delivered when the following criteria are met: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. | |
The first criteria is satisfied when a third-party payer makes a coverage decision or enters into a contractual arrangement with the Company for the test. The second criteria is satisfied when the Company performs the test and delivers the test result to the ordering physician. The third criteria is satisfied if the third-party payer’s coverage decision or reimbursement contract specifies a price for the test. The fourth criteria is satisfied based on management’s judgments regarding the collectability of the fees charged under the arrangement. Such judgments include review of past payment history. AlloMap testing may be considered investigational by some payers and not covered under their reimbursement policies. Others may cover the test, but not pay a set or determinable amount. As a result, in the absence of a reimbursement agreement or sufficient payment history, collectability cannot reasonably be assured so revenue is not recognized at the time the test is delivered. | |
If all criteria set forth above are met, revenue is recognized. When the first, third or fourth criteria are not met but third-party payers make a payment to the Company for tests performed, the Company recognizes revenue on the cash basis in the period in which the payment is received. | |
Revenue is recognized on the accrual basis net of adjustments for differences between amounts billed and the estimated receipts from payers. The amount the Company expects to collect may be lower than the agreed upon amount due to several factors, such as the amount of patient co-payments, the existence of secondary payers and claim denials. Estimated receipts are based upon historical payment practices of payers. Differences between estimated and actual cash receipts are recorded as an adjustment to revenue, which have been immaterial to date. | |
Collaboration and License Revenue | ' |
Collaboration and License Revenue | |
The Company generates revenue from collaboration and license agreements. Collaboration and license agreements may include non-refundable upfront payments, partial or complete reimbursement of research and development costs, contingent payments based on the occurrence of specified events under the agreements, license fees and royalties on sales of products or product candidates if they are successfully commercialized. The Company’s performance obligations under the collaborations may include the transfer of intellectual property rights in the form of licenses, obligations to provide research and development services and obligations to participate on certain development committees with the collaboration partners. The Company makes judgments that affect the periods over which it recognizes revenue. The Company periodically reviews its estimated periods of performance based on the progress under each arrangement and accounts for the impact of any change in estimated periods of performance on a prospective basis. | |
The Company recognizes contingent consideration received from the achievement of a substantive milestone in its entirety in the period in which the milestone is achieved, which the Company believes is more consistent with the substance of its performance under its various license and collaboration agreements. The Company did not recognize any milestones during the three months or six month periods ended June 30, 2014 or 2013. | |
Cost of Testing | ' |
Cost of Testing | |
Cost of testing reflects the aggregate costs incurred in delivering the Company’s AlloMap test results to clinicians. The components of cost of testing are materials and service costs, direct labor costs, including stock-based compensation, equipment and infrastructure expenses associated with testing samples, shipping, logistics and specimen processing charges to collect and transport samples and allocated overhead including rent, information technology, equipment depreciation and utilities and royalties. Costs associated with performing tests (except royalties) are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. As a result, our cost of testing as a percentage of revenue may vary significantly from period to period because we do not recognize all revenue in the period in which the associated costs are incurred. Royalties for licensed technology, calculated as a percentage of test revenues, are recorded as license fees in cost of testing at the time the test revenues are recognized. | |
Business Combinations | ' |
Business Combinations | |
In accordance with ASC 805, Business Combinations, the Company determines and allocates the purchase price of an acquired business to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s best estimates of inputs and assumptions that a market participant would use. The Company allocates any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, royalty rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. | |
Goodwill and indefinite-lived intangible assets including acquired in-process technology are reviewed for impairment on an annual basis or more frequently if events or circumstances indicate that goodwill or indefinite-lived intangible assets may be impaired. The Company’s goodwill evaluation is based on both qualitative and quantitative assessments regarding the fair value of goodwill relative to its carrying value. The Company assesses qualitative factors to determine if its sole reporting unit’s fair value is more likely than not to exceed its carrying value, including goodwill. In the event the Company determines that it is more likely than not that its reporting unit’s fair value is less than its carrying amount, quantitative testing is performed comparing recorded values to estimated fair values. If the fair value exceeds the carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, then the Company would calculate the potential impairment loss by comparing the implied fair value of goodwill with the carrying value. If the implied fair value of goodwill is less than the carrying value, then an impairment charge would be recorded. The Company performs its annual evaluation of goodwill during the fourth quarter of each fiscal year. Impairment losses on indefinite-lived intangible assets are recognized based solely on a comparison of the fair value of the asset to its carrying value, without consideration of any recoverability test. | |
In those circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under ASC 480, Distinguishing Liabilities from Equity, the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value as a component of operating expenses. | |
Transaction costs associated with these acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. | |
Stock-Based Compensation | ' |
Stock–Based Compensation | |
The Company uses the Black-Scholes valuation model, which requires the use of estimates such as stock price volatility and expected option lives, to value employee stock options. The Company estimates the expected option lives using historical data, volatility using data of similar companies in the diagnostics industry, and risk-free rates based on the implied yield currently available in the U.S. Treasury zero-coupon issues with a remaining term equal to the expected option lives, and dividend yield based on the Company’s historical data. | |
The Company uses the straight-line attribution method for recognizing compensation expense. Compensation expense is recognized on awards ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on the Company’s historical experience. | |
Equity instruments granted to nonemployees are valued using the Black-Scholes valuation model and are subject to periodic revaluation over their vesting terms. Nonemployee stock compensation is recognized upon vesting of the stock options which is commensurate with the period over which services are provided. | |
Impairment | ' |
Impairment | |
The Company evaluates its long-lived assets for indicators of possible impairment when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company then compares the carrying amounts of the assets with the future net undiscounted cash flows expected to be generated by such asset. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value determined using discounted estimates of future cash flows. The Company has not identified any such impairment losses to date. | |
Warrants | ' |
Warrants | |
The Company has freestanding warrants enabling counterparties to purchase shares of its convertible preferred stock and common stock. In accordance with the accounting guidance regarding distinguishing liabilities from equity, freestanding warrants for convertible preferred stock that are contingently redeemable are classified as liabilities on the balance sheets and recorded at their estimated fair value. These warrants are remeasured at each balance sheet date and any change in estimated fair value is recognized in other income (expense), net on the statements of operations. The Company adjusts the liability for changes in estimated fair value until the earlier of the exercise or expiration of the warrants or the completion of a liquidation event, including the completion of an initial public offering, at which time all preferred stock warrants would be converted into warrants to purchase common stock, and, accordingly, the liability would be reclassified to equity. | |
The Company accounts for its warrants for shares of common stock as equity in accordance with the accounting guidance distinguishing liabilities from equity. | |
Comprehensive Loss | ' |
Comprehensive Loss | |
Net loss and comprehensive loss are the same for all periods presented. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2017. Early adoption is not permitted. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the impact of adopting the new revenue standard on its consolidated financial statements. | |
In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU provide guidance on the financial statements presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions, in which case such an unrecognized tax benefit should be presented in the financial statements as a liability. The amendments in this ASU do not require new recurring disclosures and are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company adopted this guidance during the first quarter of 2014 and such adoption did not have a material impact on our condensed financial statements. |
Net_Income_Loss_Per_Share_Tabl
Net Income (Loss) Per Share (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Computation of Basic and Diluted Net Income (Loss) Per Common Share | ' | ||||||||||||||||
The following tables set forth the computation of the Company’s basic and diluted net income (loss) per common share (in thousands, except per share data): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator: | |||||||||||||||||
Net income (loss) | $ | 877 | $ | (802 | ) | $ | (427 | ) | $ | (2,150 | ) | ||||||
Add: interest expense related to subordinated convertible note, less gain on change in fair value of derivative related to subordinated convertible note | 15 | — | — | — | |||||||||||||
Net income (loss) attributable to common stockholders | $ | 892 | $ | (802 | ) | $ | (427 | ) | $ | (2,150 | ) | ||||||
Denominator: | |||||||||||||||||
Weighted-average shares used to compute basic net income (loss) per common share | 1,013,128 | 1,011,123 | 1,012,769 | 1,011,116 | |||||||||||||
Effect of potentially dilutive securities: | |||||||||||||||||
Employee stock options | 381,434 | — | — | — | |||||||||||||
Convertible preferred stock | 5,355,280 | — | — | — | |||||||||||||
Subordinated convertible note | 189,726 | — | — | — | |||||||||||||
Weighted-average shares used to compute diluted net income (loss) per common share | 6,939,568 | 1,011,123 | 1,012,769 | 1,011,116 | |||||||||||||
Net income (loss) per share | |||||||||||||||||
Net income (loss) per common share - basic | $ | 0.87 | $ | (0.79 | ) | $ | (0.42 | ) | $ | (2.13 | ) | ||||||
Net income (loss) per common share - diluted | $ | 0.13 | $ | (0.79 | ) | $ | (0.42 | ) | $ | (2.13 | ) | ||||||
Potentially Dilutive Securities Excluded from Diluted Net Income (Loss) Per Common Share | ' | ||||||||||||||||
The following potentially dilutive securities have been excluded from diluted net income (loss) per common share, because their effect would be antidilutive: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Options to purchase common stock | 469,163 | 505,043 | 907,318 | 505,043 | |||||||||||||
Warrants to purchase common stock | 82,190 | 82,190 | 82,190 | 82,190 | |||||||||||||
Warrants to purchase convertible preferred stock | 541,613 | 541,613 | 541,613 | 541,613 | |||||||||||||
Subordinated convertible note | — | — | 233,311 | — | |||||||||||||
Convertible preferred stock | — | 5,160,085 | 6,048,220 | 5,160,085 | |||||||||||||
Total | 1,092,966 | 6,288,931 | 7,812,652 | 6,288,931 | |||||||||||||
Business_Combination_Tables
Business Combination (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||||||
Summary of Purchase Consideration | ' | ||||||||||||||||
The following table summarizes the purchase consideration (in thousands): | |||||||||||||||||
Cash paid upon executing agreement and to be paid upon end of objection period | $ | 600 | |||||||||||||||
Estimated fair value of Series G preferred stock issued | 13,873 | ||||||||||||||||
Estimated fair value of stock options assumed by the Company | 369 | ||||||||||||||||
Contingent consideration - Series G convertible preferred stock to be issued upon the achievement of a future milestone | 2,313 | ||||||||||||||||
Total estimated purchase consideration | $ | 17,155 | |||||||||||||||
Schedule of Allocation of Estimated Purchase Consideration | ' | ||||||||||||||||
The following table provides the allocation of the estimated purchase consideration (in thousands): | |||||||||||||||||
Identifiable intangible assets - In-process technology | $ | 6,650 | |||||||||||||||
Goodwill | 12,005 | ||||||||||||||||
Deferred tax liability, net | (1,500 | ) | |||||||||||||||
Total estimated assets acquired and liabilities assumed | $ | 17,155 | |||||||||||||||
Schedule of Pro Forma Results of Operations | ' | ||||||||||||||||
The following table presents pro forma results of operations and gives effect to the IMX transaction as if the transaction had been consummated on January 1, 2013. The unaudited pro forma results of operations have been prepared for comparative purposes only and are not necessarily indicative of what would have occurred had the business combination been completed at the beginning of the period or of the results that may occur in the future. Furthermore, the pro forma financial information does not reflect the impact of any reorganization or operating efficiencies resulting from combining the two companies (in thousands, except per share data). | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Net revenue | $ | 6,776 | $ | 5,457 | $ | 12,700 | $ | 10,438 | |||||||||
Net loss | $ | (518 | ) | $ | (1,169 | ) | $ | (2,288 | ) | $ | (1,746 | ) | |||||
Net loss per common share - basic and diluted | $ | (0.51 | ) | $ | (1.16 | ) | $ | (2.26 | ) | $ | (1.73 | ) | |||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||
The tables below presents the fair value of the Company’s financial assets and liabilities, by level, within the fair value hierarchy that are measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
June 30, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Money market funds | $ | 7,847 | $ | — | $ | — | $ | 7,847 | |||||||||
Liabilities | |||||||||||||||||
Contingent consideration liability | $ | — | $ | — | $ | 2,313 | $ | 2,313 | |||||||||
Convertible preferred stock warrants | — | — | 808 | 808 | |||||||||||||
Derivative liability related to subordinated convertible note | — | — | 120 | 120 | |||||||||||||
Total liabilities | $ | — | $ | — | $ | 3,241 | $ | 3,241 | |||||||||
December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Assets | |||||||||||||||||
Money market funds | $ | 5,204 | $ | — | $ | — | $ | 5,204 | |||||||||
Liabilities | |||||||||||||||||
Convertible preferred stock warrants | $ | — | $ | — | $ | 525 | $ | 525 | |||||||||
Estimated Fair Value of Convertible Preferred Stock Warrant Liability Determined Using Black-Scholes Option Pricing Model | ' | ||||||||||||||||
The estimated fair value of the convertible preferred stock warrant liability was determined using the Black-Scholes option pricing model using the following assumptions: | |||||||||||||||||
As of | As of | ||||||||||||||||
June 30, 2014 | December 31, 2013 | ||||||||||||||||
Estimated fair value of common stock | $ | 11.44 | $ | 12.4 | |||||||||||||
Risk-free interest rate | 0.9% - 1.6% | 0.8% - 2.1% | |||||||||||||||
Volatility | 41% - 43% | 40% - 45% | |||||||||||||||
Estimated term equal to the remaining contractual term | 2.8 - 5.1 years | 3.3 - 5.6 years | |||||||||||||||
Expected dividend yield | — | — | |||||||||||||||
Summary of Changes in Level 3 Financial Instruments | ' | ||||||||||||||||
The following table presents the changes in the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
Level 3 | |||||||||||||||||
Contingent | Convertible | Derivative | Total | ||||||||||||||
Consideration | Preferred | Liability | |||||||||||||||
Liability | Stock | Related to | |||||||||||||||
Warrants | Subordinated | ||||||||||||||||
Convertible | |||||||||||||||||
Note | |||||||||||||||||
Balance as of December 31, 2013 | $ | — | $ | 525 | $ | — | $ | 525 | |||||||||
Issuance of financial instruments | 2,313 | — | 239 | 2,552 | |||||||||||||
Change in fair value | — | 283 | (119 | ) | 164 | ||||||||||||
Balance as of June 30, 2014 | $ | 2,313 | $ | 808 | $ | 120 | $ | 3,241 | |||||||||
Inventory_Tables
Inventory (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Summary of Inventory | ' | ||||||||
The following table summarizes the Company’s inventory (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Finished goods | $ | 261 | $ | 230 | |||||
Raw materials | 353 | 288 | |||||||
Total inventory | $ | 614 | $ | 518 | |||||
Accrued_and_Other_Liabilities_
Accrued and Other Liabilities (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Payables And Accruals [Abstract] | ' | ||||||||
Components of Accrued and Other Liabilities | ' | ||||||||
The following table represents the components of accrued and other liabilities (in thousands): | |||||||||
June 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Accrued IPO costs | $ | 1,126 | $ | — | |||||
Professional fees | 890 | 175 | |||||||
Test sample processing fees | 306 | 195 | |||||||
Accrued overpayments and refunds | 183 | 215 | |||||||
Bifurcated derivative associated with subordinated convertible note | 120 | — | |||||||
Clinical studies | 108 | 84 | |||||||
Deferred rent – current portion | 173 | 145 | |||||||
Capital leases – current portion | 81 | 43 | |||||||
Other accrued expenses | 662 | 191 | |||||||
Total accrued and other liabilities | $ | 3,649 | $ | 1,048 | |||||
Stock_Option_Plans_Tables
Stock Option Plans (Tables) | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ||||||||||||||||
Summary of Option Activity and Related Information | ' | ||||||||||||||||
The following table summarizes option activity and related information during the six months ended June 30, 2014 under the 2008 Equity Incentive Plan and for options which remain outstanding under the 1998 Stock Plan: | |||||||||||||||||
Shares | Options Outstanding | ||||||||||||||||
Available | |||||||||||||||||
for Grant | Number of | Weighted- | |||||||||||||||
Shares | average | ||||||||||||||||
Exercise Price | |||||||||||||||||
Balance at December 31, 2013 | 332,995 | 466,965 | $ | 1.99 | |||||||||||||
Increase in shares reserved for issuance | 102,189 | — | $ | — | |||||||||||||
Granted | (461,795 | ) | 461,795 | $ | 12.4 | ||||||||||||
Exercised | — | (2,199 | ) | $ | 2.56 | ||||||||||||
Forfeited | 14,532 | (14,532 | ) | $ | 10.46 | ||||||||||||
Expired | 12,079 | (12,079 | ) | $ | 2.96 | ||||||||||||
Balance at June 30, 2014 | — | 899,950 | $ | 7.22 | |||||||||||||
Summary of Options Outstanding and Exercisable Vested and Expected to Vest | ' | ||||||||||||||||
Options outstanding and exercisable that have vested and are expected to vest at June 30, 2014 are as follows: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Shares | average | average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value | |||||||||||||||
Contractual | (in thousands) | ||||||||||||||||
Life (Years) | |||||||||||||||||
Vested | 367,706 | $ | 2.69 | 6.25 | $ | 3,219 | |||||||||||
Expected to vest | 532,244 | $ | 10.32 | 9.49 | 606 | ||||||||||||
Total | 899,950 | $ | 7.22 | 8.17 | $ | 3,825 | |||||||||||
Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards | ' | ||||||||||||||||
The Company’s results of operations include expense relating to employee and nonemployee stock-based payment awards as follows (in thousands): | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of testing | $ | 9 | $ | 1 | $ | 9 | $ | 2 | |||||||||
Research and development | 21 | 2 | 22 | 4 | |||||||||||||
Sales and marketing | 8 | 1 | 9 | 2 | |||||||||||||
General and administrative | 99 | 15 | 145 | 30 | |||||||||||||
$ | 137 | $ | 19 | $ | 185 | $ | 38 | ||||||||||
Weighted-Average Assumptions Used to Fair Value of Stock-Based Awards | ' | ||||||||||||||||
The fair value of stock-based awards was estimated using the Black-Scholes option-pricing model using the following weighted-average assumptions: | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
June 30, | June 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Risk-free interest rate | 1.74 | % | 1.02 | % | 1.7 | % | 1.02 | % | |||||||||
Volatility | 42.18 | % | 45.29 | % | 41.84 | % | 45.41 | % | |||||||||
Expected term, in years | 5.3 | 6 | 5.1 | 6 | |||||||||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | 0 | % |
Subsequent_Events_Tables
Subsequent Events (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Subsequent Events [Abstract] | ' | ||||||||
Pro Forma Selected Balance Sheet Data | ' | ||||||||
The selected balance sheet data below presents, on a pro forma basis, the impact of the Company’s IPO on the Company’s consolidated condensed balance sheet as of June 30, 2014. | |||||||||
As of June 30, 2014 | |||||||||
(in thousands) | Actual | Pro Forma | |||||||
(Unaudited) | |||||||||
Selected Balance Sheet Data: | |||||||||
Cash and cash equivalents | $ | 7,872 | $ | 44,327 | |||||
Total debt | 18,772 | 13,977 | |||||||
Convertible preferred stock | 149,444 | — | |||||||
Total stockholders’ (deficit) equity | (150,910 | ) | 39,885 |
Organization_Additional_Inform
Organization - Additional Information (Detail) | 6 Months Ended | 6 Months Ended | 0 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jul. 01, 2014 | Jul. 01, 2014 | |
Segment | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | ||
Subsequent Event [Member] | Subsequent Event [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ' | ' | ' | ' | ' |
Number of operating segment | 1 | ' | ' | ' | ' |
Reverse stock split, ratio | ' | ' | ' | 0.145985401 | ' |
Common stock, shares authorized | 10,000,000 | 7,737,226 | 10,000,000 | ' | 10,000,000 |
Reverse Stock Split effective date | ' | ' | 14-Jul-14 | ' | ' |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies - Additional Information - Concentration of Credit Risk (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Services Revenue [Member] | Customer Concentration Risk [Member] | Minimum [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Services Revenue [Member] | Customer Concentration Risk [Member] | Medicare [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage | 49.00% | 57.00% | 49.00% | 55.00% |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Minimum [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | 10.00% | ' |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | Medicare [Member] | ' | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | 72.00% | ' |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Accounting Policies [Abstract] | ' | ' | ' | ' | ' |
Cash equivalents maturity, description | ' | ' | 'The Company considers all highly liquid investments that are readily convertible into cash having maturities at the time of purchase of three months or less to be cash equivalents. | ' | ' |
Deferred offering costs | $2.80 | ' | $2.80 | ' | $0 |
Revenue recognition under milestone method | $0 | $0 | $0 | $0 | ' |
Net_Income_Loss_Per_Share_Comp
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Income (Loss) Per Common Share (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Numerator: | ' | ' | ' | ' |
Net income (loss) | $877 | ($802) | ($427) | ($2,150) |
Add: interest expense related to subordinated convertible note, less gain on change in fair value of derivative related to subordinated convertible note | 15 | 0 | 0 | 0 |
Net income (loss) attributable to common stockholders | $892 | ($802) | ($427) | ($2,150) |
Denominator: | ' | ' | ' | ' |
Weighted-average shares used to compute basic net income (loss) per common share | 1,013,128 | 1,011,123 | 1,012,769 | 1,011,116 |
Effect of potentially dilutive securities: | ' | ' | ' | ' |
Employee stock options | 381,434 | 0 | 0 | 0 |
Convertible preferred stock | 5,355,280 | 0 | 0 | 0 |
Subordinated convertible note | 189,726 | 0 | 0 | 0 |
Weighted-average shares used to compute diluted net income (loss) per common share | 6,939,568 | 1,011,123 | 1,012,769 | 1,011,116 |
Net income (loss) per common share - basic | $0.87 | ($0.79) | ($0.42) | ($2.13) |
Net income (loss) per common share - diluted | $0.13 | ($0.79) | ($0.42) | ($2.13) |
Net_Income_Loss_Per_Share_Pote
Net Income (Loss) Per Share - Potentially Dilutive Securities Excluded from Diluted Net Income (Loss) Per Common Share (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potential dilutive securities excluded from diluted net income (loss) per common share, Total | 1,092,966 | 6,288,931 | 7,812,652 | 6,288,931 |
Options to purchase common stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potential dilutive securities excluded from diluted net income (loss) per common share, Total | 469,163 | 505,043 | 907,318 | 505,043 |
Warrants to purchase common stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potential dilutive securities excluded from diluted net income (loss) per common share, Total | 82,190 | 82,190 | 82,190 | 82,190 |
Warrants to purchase convertible preferred stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potential dilutive securities excluded from diluted net income (loss) per common share, Total | 541,613 | 541,613 | 541,613 | 541,613 |
Subordinated convertible note [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potential dilutive securities excluded from diluted net income (loss) per common share, Total | 0 | 0 | 233,311 | 0 |
Convertible preferred stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potential dilutive securities excluded from diluted net income (loss) per common share, Total | 0 | 5,160,085 | 6,048,220 | 5,160,085 |
Net_Income_Loss_Per_Share_Addi
Net Income (Loss) Per Share - Additional Information (Detail) (Series G Preferred Stock [Member], USD $) | Jun. 30, 2014 |
In Millions, except Per Share data, unless otherwise specified | |
Series G Preferred Stock [Member] | ' |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' |
Subordinated convertible note issued | $5 |
Subordinated convertible note, conversion price | $21.78 |
Business_Combination_Additiona
Business Combination - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | ||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 10, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 10, 2014 | Jun. 10, 2014 | Jun. 10, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 10, 2014 | Jun. 10, 2014 | |
ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | Series G Preferred Stock [Member] | Scenario, Previously Reported [Member] | CareDx, Inc [Member] | CareDx, Inc [Member] | Contingent Consideration [Member] | Contingent Consideration [Member] | Stock Options [Member] | ||||||
CommercialTests | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | Series G Preferred Stock [Member] | Series G Preferred Stock [Member] | ||||||||||
ImmuMetrix, Inc. [Member] | ImmuMetrix, Inc. [Member] | ||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition date | ' | ' | ' | ' | ' | ' | ' | 10-Jun-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated purchase price | ' | ' | ' | ' | ' | $17,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business acquisition purchase price, cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' |
Shares issued, shares issuable upon achievement of future milestone, and options assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 911,364 | ' | ' | ' | ' | 227,845 | 23,229 |
Estimated fair value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,873,000 | ' | ' | ' | ' | 2,313,000 | 369,000 |
Milestone description | ' | ' | ' | ' | ' | ' | ' | 'The milestone will be achieved if the Company completes 2,500 commercial tests involving the measurement of cfDNA in organ transplant recipients in the United States no later than six years after the closing date of the acquisition. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of commercial tests involving the measurement of cfDNA to be completed | ' | ' | ' | ' | ' | ' | ' | 2,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Milestone measurement period | ' | ' | ' | ' | ' | ' | ' | '6 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tangible assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' |
Probability of the achievement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 65.00% | ' | ' |
Estimated portion of assumed stock options that is subject to future service requirements | ' | ' | ' | ' | ' | 32,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total purchase consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,155,000 | ' | 19,100,000 | ' | ' | ' | ' | ' |
Goodwill | 12,005,000 | ' | 12,005,000 | ' | 0 | ' | ' | ' | ' | 12,005,000 | ' | 14,100,000 | ' | ' | ' | ' | ' |
Deferred tax liability | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | 1,600,000 | ' | ' | ' | ' | ' |
Net estimated royalty rate | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Discount rate of cash flows | ' | ' | ' | ' | ' | ' | ' | 18.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated remaining useful life of intangible assets | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Tax benefit was recorded for the net deferred tax liability | 1,500,000 | 0 | 1,500,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition-related costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | 1,700,000 | ' | ' | ' |
Stock-based compensation | ' | ' | 185,000 | 38,000 | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 200,000 | ' | ' | ' |
Business combination pro forma removal (addition) in income tax benefit | ' | ' | ' | ' | ' | ' | $1,500,000 | $1,500,000 | $1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Business_Combination_Summary_o
Business Combination - Summary of Purchase Consideration (Detail) (ImmuMetrix, Inc. [Member], USD $) | 0 Months Ended |
In Thousands, unless otherwise specified | Jun. 10, 2014 |
Business Acquisition [Line Items] | ' |
Cash paid upon executing agreement and to be paid upon end of objection period | $600 |
Total estimated purchase consideration | 17,155 |
Series G Preferred Stock [Member] | ' |
Business Acquisition [Line Items] | ' |
Estimated fair value | 13,873 |
Stock Options [Member] | Series G Preferred Stock [Member] | ' |
Business Acquisition [Line Items] | ' |
Estimated fair value | 369 |
Contingent Consideration [Member] | Series G Preferred Stock [Member] | ' |
Business Acquisition [Line Items] | ' |
Estimated fair value | $2,313 |
Business_Combination_Schedule_
Business Combination - Schedule of Allocation of Estimated Purchase Consideration (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 10, 2014 |
In Thousands, unless otherwise specified | ImmuMetrix, Inc. [Member] | ||
Business Acquisition [Line Items] | ' | ' | ' |
Identifiable intangible assets - In-process technology | ' | ' | $6,650 |
Goodwill | 12,005 | 0 | 12,005 |
Deferred tax liability, net | ' | ' | -1,500 |
Total estimated assets acquired and liabilities assumed | ' | ' | $17,155 |
Business_Combination_Schedule_1
Business Combination - Schedule of Pro Forma Results of Operations (Detail) (ImmuMetrix, Inc. [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
ImmuMetrix, Inc. [Member] | ' | ' | ' | ' |
Business Acquisition [Line Items] | ' | ' | ' | ' |
Net revenue | $6,776 | $5,457 | $12,700 | $10,438 |
Net loss | ($518) | ($1,169) | ($2,288) | ($1,746) |
Net loss per common share - basic and diluted | ($0.51) | ($1.16) | ($2.26) | ($1.73) |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Recurring [Member], USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Money market funds | $7,847 | $5,204 |
Liabilities | ' | ' |
Contingent consideration liability | 2,313 | ' |
Convertible preferred stock warrants | 808 | 525 |
Derivative liability related to subordinated convertible note | 120 | ' |
Total liabilities | 3,241 | ' |
Fair Value Measured Using - Level 1 [Member] | ' | ' |
Assets | ' | ' |
Money market funds | 7,847 | 5,204 |
Liabilities | ' | ' |
Contingent consideration liability | 0 | ' |
Convertible preferred stock warrants | 0 | 0 |
Derivative liability related to subordinated convertible note | 0 | ' |
Total liabilities | 0 | ' |
Fair Value Measured Using - Level 2 [Member] | ' | ' |
Assets | ' | ' |
Money market funds | 0 | 0 |
Liabilities | ' | ' |
Contingent consideration liability | 0 | ' |
Convertible preferred stock warrants | 0 | 0 |
Derivative liability related to subordinated convertible note | 0 | ' |
Total liabilities | 0 | ' |
Fair Value Measured Using - Level 3 [Member] | ' | ' |
Assets | ' | ' |
Money market funds | 0 | 0 |
Liabilities | ' | ' |
Contingent consideration liability | 2,313 | ' |
Convertible preferred stock warrants | 808 | 525 |
Derivative liability related to subordinated convertible note | 120 | ' |
Total liabilities | $3,241 | ' |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Series G Preferred Stock [Member] | |||
Fair Value Of Assets And Liabilities Measured On Non Recurring Basis [Line Items] | ' | ' | ' |
Transfers between Level 1, Level 2 and Level 3 categories during the periods | $0 | $0 | ' |
Estimated fair value of Series G preferred stock | ' | ' | $15.62 |
Payment of the contingent consideration | ' | ' | 65.00% |
Fair_Value_Measurements_Estima
Fair Value Measurements - Estimated Fair Value of Convertible Preferred Stock Warrant Liability Determined Using Black-Scholes Option Pricing Model (Detail) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' |
Estimated fair value of common stock | $11.44 | $12.40 |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' |
Risk-free interest rate | 0.90% | 0.80% |
Volatility | 41.00% | 40.00% |
Estimated term equal to the remaining contractual term | '2 years 9 months 18 days | '3 years 3 months 18 days |
Maximum [Member] | ' | ' |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ' | ' |
Risk-free interest rate | 1.60% | 2.10% |
Volatility | 43.00% | 45.00% |
Estimated term equal to the remaining contractual term | '5 years 1 month 6 days | '5 years 7 months 6 days |
Fair_Value_Measurements_Summar
Fair Value Measurements - Summary of Changes in Level 3 Financial Instruments (Detail) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Significant Unobservable Inputs (Level 3) [Line Items] | ' |
Balance as of December 31, 2013 | $525 |
Issuance of financial instruments | 2,552 |
Change in fair value | 164 |
Balance as of June 30, 2014 | 3,241 |
Significant Unobservable Inputs (Level 3), Convertible Preferred Stock Warrants [Member] | ' |
Significant Unobservable Inputs (Level 3) [Line Items] | ' |
Balance as of December 31, 2013 | 525 |
Issuance of financial instruments | 0 |
Change in fair value | 283 |
Balance as of June 30, 2014 | 808 |
Significant Unobservable Inputs (Level 3), Derivative Liability Related to Subordinated Convertible Note [Member] | ' |
Significant Unobservable Inputs (Level 3) [Line Items] | ' |
Balance as of December 31, 2013 | 0 |
Issuance of financial instruments | 239 |
Change in fair value | -119 |
Balance as of June 30, 2014 | 120 |
Significant Unobservable Inputs (Level 3), Contingent Consideration Liability [Member] | ' |
Significant Unobservable Inputs (Level 3) [Line Items] | ' |
Balance as of December 31, 2013 | 0 |
Issuance of financial instruments | 2,313 |
Change in fair value | 0 |
Balance as of June 30, 2014 | $2,313 |
Inventory_Summary_of_Inventory
Inventory - Summary of Inventory (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory Disclosure [Abstract] | ' | ' |
Finished goods | $261 | $230 |
Raw materials | 353 | 288 |
Total inventory | $614 | $518 |
Accrued_and_Other_Liabilities_1
Accrued and Other Liabilities - Components of Accrued and Other Liabilities (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables And Accruals [Abstract] | ' | ' |
Accrued IPO costs | $1,126 | $0 |
Professional fees | 890 | 175 |
Test sample processing fees | 306 | 195 |
Accrued overpayments and refunds | 183 | 215 |
Bifurcated derivative associated with subordinated convertible note | 120 | 0 |
Clinical studies | 108 | 84 |
Deferred rent - current portion | 173 | 145 |
Capital leases - current portion | 81 | 43 |
Other accrued expenses | 662 | 191 |
Total accrued and other liabilities | $3,649 | $1,048 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Feb. 11, 2014 | Feb. 11, 2014 | Feb. 11, 2014 |
Unpaid Royalties [Member] | Unpaid Royalties [Member] | Interest On Unpaid Royalties [Member] | ||
July 1, 2011 to March 31, 2013 [Member] | April 1, 2013 to Present [Member] | July 1, 2011 to March 31, 2013 [Member] | ||
Loss Contingencies [Line Items] | ' | ' | ' | ' |
Damages sought | ' | $1,800,000 | $1,600,000 | $85,000 |
Loss contingency liability | $3,500,000 | ' | ' | ' |
Collaboration_and_Licensing_Ag1
Collaboration and Licensing Agreements - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
Jul. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Up-front Payment Arrangement [Member] | Diaxonhit (DHT) [Member] | Diaxonhit (DHT) [Member] | Laboratory Corp Of America Holdings [Member] | Laboratory Corp Of America Holdings [Member] | Laboratory Corp Of America Holdings [Member] | Laboratory Corp Of America Holdings [Member] | |
USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront license fee payment | ' | ' | ' | ' | ' | ' | ' | $1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognized under collaboration and licensing agreements | ' | ' | ' | 1,800 | 104,100 | 31,200 | 267,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of upfront license fee | ' | ' | ' | 0 | 62,500 | 15,000 | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reimbursement of research and development expenses | ' | ' | ' | 1,800 | 41,600 | 16,200 | 142,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Portion of upfront license fee included in current deferred revenue | ' | ' | ' | 674,000 | ' | 674,000 | ' | ' | 80,000 | 611,000 | ' | ' | ' | ' | ' | ' |
Research and development expenses | ' | ' | ' | 792,000 | 846,000 | 1,512,000 | 1,848,000 | ' | ' | ' | ' | ' | 3,600 | 83,000 | 32,000 | 284,000 |
Description of agreement expire term | ' | ' | ' | ' | ' | 'The agreement will expire at the later of the last-to-expire patent in the EEA or ten years from the first commercial sale of the test in the EEA, which is expected to occur in late 2014 or early 2015. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Upfront cash payment | ' | 503,000 | 387,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Refundable upfront payments | ' | 344,000 | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock value | ' | ' | ' | 1,000 | ' | 1,000 | ' | ' | 1,000 | ' | 503,000 | 387,500 | ' | ' | ' | ' |
Shares sold for consideration | 467,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognized from the arrangement with DHT | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty revenues | ' | ' | ' | 59,000 | 21,000 | 117,000 | 30,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty revenues receivable balance | ' | ' | ' | $59,000 | ' | $59,000 | ' | ' | $37,000 | ' | ' | ' | ' | ' | ' | ' |
Subordinated_Convertible_Note_
Subordinated Convertible Note - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2014 | Apr. 17, 2014 | Jun. 30, 2014 | Apr. 17, 2014 | Jul. 22, 2014 | Jun. 30, 2014 | Apr. 17, 2014 | |
Illumina, Inc. [Member] | Illumina, Inc. [Member] | Subsequent Event [Member] | IPO [Member] | IPO [Member] | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Subordinated convertible promissory note issued | ' | ' | ' | ' | $5,000,000 | ' | ' | ' |
Subordinated convertible promissory note annual interest rate | ' | ' | ' | ' | 8.00% | ' | ' | ' |
Subordinated convertible promissory note maturity term | ' | ' | ' | '1 year | ' | ' | ' | ' |
Initial Public offering, closing date | ' | 22-Jul-14 | ' | ' | ' | ' | ' | ' |
Shares issued upon conversion | ' | ' | ' | ' | ' | 510,777 | ' | ' |
Change in control for repayment | ' | ' | ' | ' | ' | ' | 5.00% | 10.00% |
Estimated fair value of the bifurcated embedded derivative liabilities | 100,000 | 100,000 | 200,000 | ' | ' | ' | ' | ' |
Amortization of debt discount | 51,000 | ' | ' | ' | ' | ' | ' | ' |
Change in value of embedded derivative | $100,000 | $100,000 | ' | ' | ' | ' | ' | ' |
Stock_Option_Plans_Summary_of_
Stock Option Plans - Summary of Option Activity and Related Information (Detail) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Shares Available for Grant, Beginning Balance | 332,995 |
Shares Available for Grant, Increase in shares reserved for issuance | 102,189 |
Shares Available for Grant, Granted | -461,795 |
Shares Available for Grant, Exercised | ' |
Shares Available for Grant, Forfeited | 14,532 |
Shares Available for Grant, Expired | 12,079 |
Shares Available for Grant, Ending Balance | 0 |
Number of Shares, Beginning Balance | 466,965 |
Number of Shares, Increase in shares reserved for issuance | ' |
Number of Shares, Granted | 461,795 |
Number of Shares, Exercised | -2,199 |
Number of Shares, Forfeited | -14,532 |
Number of Shares, Expired | -12,079 |
Number of Shares, Ending Balance | 899,950 |
Weighted-average Exercise Price, Beginning Balance | $1.99 |
Weighted-average Exercise Price, Increase in shares reserved for issuance | ' |
Weighted-average Exercise Price, Granted | $12.40 |
Weighted-average Exercise Price, Exercised | $2.56 |
Weighted-average Exercise Price, Forfeited | $10.46 |
Weighted-average Exercise Price, Expired | $2.96 |
Weighted-average Exercise Price, Ending Balance | $7.22 |
Stock_Option_Plans_Additional_
Stock Option Plans - Additional Information (Detail) (USD $) | 6 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Dec. 31, 2013 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ' |
Weighted-average grant-date fair value of options granted during the period | $4.94 | ' |
Common stock price per share | $11.44 | $12.40 |
Total unrecognized stock-based compensation related to nonvested employee stock option awards granted | $2.20 | ' |
Remaining vesting period | '3 years 8 months 12 days | ' |
Stock_Option_Plans_Summary_of_1
Stock Option Plans - Summary of Options Outstanding and Exercisable Vested and Expected to Vest (Detail) (USD $) | 6 Months Ended |
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Number of Shares, Vested | 367,706 |
Number of Shares, Expected to vest | 532,244 |
Number of Shares, Total | 899,950 |
Weighted-average Exercise Price, Vested | $2.69 |
Weighted-average Exercise Price, Expected to vest | $10.32 |
Weighted-average Exercise Price, Total | $7.22 |
Weighted-average Remaining Contractual Life (Years), Vested | '6 years 3 months |
Weighted-average Remaining Contractual Life (Years), Expected to vest | '9 years 5 months 27 days |
Weighted-average Remaining Contractual Life (Years), Total | '8 years 2 months 1 day |
Aggregate Intrinsic Value, Vested | $3,219 |
Aggregate Intrinsic Value, Expected to vest | 606 |
Aggregate Intrinsic Value, Total | $3,825 |
Stock_Option_Plans_Summary_of_2
Stock Option Plans - Summary of Expense Relating to Employee and Nonemployee Stock-Based Payment Awards (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation, Total expensed | $137 | $19 | $185 | $38 |
Cost of testing [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation, Total expensed | 9 | 1 | 9 | 2 |
Research and development [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation, Total expensed | 21 | 2 | 22 | 4 |
Sales and marketing [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation, Total expensed | 8 | 1 | 9 | 2 |
General and administrative [Member] | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation, Total expensed | $99 | $15 | $145 | $30 |
Stock_Option_Plans_WeightedAve
Stock Option Plans - Weighted-Average Assumptions Used to Fair Value of Stock-Based Awards (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' | ' | ' | ' |
Risk-free interest rate | 1.74% | 1.02% | 1.70% | 1.02% |
Volatility | 42.18% | 45.29% | 41.84% | 45.41% |
Expected term, in years | '5 years 3 months 18 days | '6 years | '5 years 1 month 6 days | '6 years |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income tax benefit | $1,500 | $0 | $1,500 | $0 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jul. 22, 2014 | Aug. 28, 2014 | Jul. 22, 2014 | Jul. 22, 2014 | Jul. 22, 2014 |
In Millions, except Share data, unless otherwise specified | Pro Forma [Member] | Pro Forma [Member] | Pro Forma [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||
Subordinated Convertible Promissory Note [Member] | IPO [Member] | IPO [Member] | IPO [Member] | Amendment [Member] | Amendment [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares authorized | 10,000,000 | 7,737,226 | ' | ' | ' | ' | ' | ' | ' | 100,000,000 |
Common stock, par value | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | $0.00 |
Convertible preferred stock, shares authorized | 7,501,370 | 6,417,954 | ' | ' | ' | ' | ' | ' | ' | 10,000,000 |
Convertible preferred stock, par value | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | $0.00 |
Number of common stock issued through public offering | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' |
Public offering price per share | ' | ' | ' | ' | $10 | ' | ' | ' | ' | ' |
Issuance of additional shares pursuant to exercise of underwriters' overallotment option | ' | ' | ' | ' | ' | ' | ' | ' | 220,000 | ' |
Net cash proceeds from IPO, net of underwriting discounts and commissions | ' | ' | ' | ' | ' | ' | $35.50 | ' | ' | ' |
Shares issued upon conversion | ' | ' | 6,048,220 | 510,000 | ' | 510,777 | ' | ' | ' | ' |
Reclassification of the convertible preferred stock warrant liability to additional paid-in capital | ' | ' | $0.80 | ' | ' | ' | ' | ' | ' | ' |
Subsequent_Events_Pro_Forma_Se
Subsequent Events - Pro Forma Selected Balance Sheet Data (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||
Subsequent Event [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | $7,872 | $5,128 | $4,485 | $5,830 |
Total debt | 8,338 | 10,914 | ' | ' |
Convertible preferred stock | 149,444 | 135,202 | ' | ' |
Total stockholders' (deficit) equity | -150,910 | -150,673 | ' | ' |
Actual [Member] | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | 7,872 | ' | ' | ' |
Total debt | 18,772 | ' | ' | ' |
Convertible preferred stock | 149,444 | ' | ' | ' |
Total stockholders' (deficit) equity | -150,910 | ' | ' | ' |
Pro Forma [Member] | ' | ' | ' | ' |
Subsequent Event [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | 44,327 | ' | ' | ' |
Total debt | 13,977 | ' | ' | ' |
Total stockholders' (deficit) equity | $39,885 | ' | ' | ' |